Page one of today’s Financial Review is dominated by a story
under the heading “New TV channels in media plan,” which outlines the
fullest details yet of the government’s blueprint to change the
country’s media laws.

The plan is presented as a bold “shake-up of the $12 billion media
industry” that will “allow” TV networks to offer viewers multiple
digital channels and “give” pay TV the right to broadcast more major
sporting events.

And the good news doesn’t end there. According to the Fin,
Communications Minister Helen Coonan intends to introduce a “diversity”
rule that “would ensure there were five large media companies in each
capital city.”

Five large media companies in each city – that sounds really diverse. Except for one thing: there are currently nine large media companies operating in the two cities that really matter, Sydney and Melbourne. Count ’em:

Newspapers: News Limited, Fairfax (2)

TV: Nine, Seven Ten (3)

Radio: Southern Cross, Austereo, Australian Radio Network, DMG (4)

According to the AFR, the five-company diversity
rule will be the only cross-media restriction under the government’s
new plan – which means that companies could own newspapers AND
television AND radio in one city (subject, of course, to ACCC approval).

And you don’t need to be a mathematics professor to work out the answer to this primary school arithmetic test:

If there are nine companies in the market now, and only five must
remain after Mr Howard’s new rules are introduced, how many
companies can disappear to still ensure “diversity”?

Answer: four. Under the government’s proposed
“diversity” test, four major media companies in the country’s major
cities could be taken over by, or merged with, the remaining companies.

This is a media reform recipe that will bury Australian democracy. It
will leave the country’s key markets – where all the major commentary,
analysis and media influence resides – with a handful of the most
powerful media owners anywhere in the world. Unless the ACCC
intervenes, this “diversity” test could result in a carve-up that could
produces this result:

Newspapers: News Limited, Fairfax

TV: PBL, News, Fairfax

Radio: PBL, News, Fairfax, ARN, DMG

A result like that would make everyone much richer – the acquirers and
the acquired – and Australia much poorer. We’d become a country whose
news agenda was controlled by even fewer (and bigger) media owners that
we have now.

Today, with the news of the government’s proud new “diversity test,” that possibility just became a lot more likely.

Peter Fray

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